Theft investigation wrapping up, says DA

Despite having dropped from the headlines, the investigation into the "finding" and subsequent sale to Gawker Media of the prototype iPhone 4, as reported last April, is ongoing and about to wrap up, according to the deputy district attorney in the case. Police interviewed a number of Apple employees (and other people) in the matter, including CEO Steve Jobs.

CNET's Greg Sandoval reports that Stephen Wagstaffe, the chief deputy DA for San Mateo county, expects a final police report on the matter as early as "the next few weeks," and will then determine if any criminal charges are to be filed.

Last April, Gizmodo (a site owned by Gawker) bought the prototype iPhone from a 21-year-old student named Brian Hogan who claimed he found it in a bar, left behind accidentally by an Apple engineer. Hogan allegedly held onto the unit for several days, using the included Facebook app to determine the identity of the engineer, but claims he was "unable" to return it to Apple. The phone was remotely wiped before being sold to Gizmodo and published in a report that included pictures, videos, and a partial teardown of the unit. Apple then sent a written request to Gizmodo for the return of the phone.

At issue is whether any laws were broken in the affair. A number of tech pundits, including Daring Fireball's John Gruber and Betanews' Joe Wilcox, cite California law that seems to make clear that property, either found or stolen, which is then sold is considered stolen property and a criminal act. Gizmodo editors claimed to have paid $5,000 for the device, plus a possible "bonus" said to be "finder's fee." The amount claimed to have been paid could be significant if charges are filed, as $5,000 is the threshold for the federal Title 18 statute, which carries a maximum ten-year jail sentence.

In addition to Gawker Media's potential culpability in buying stolen property, there is also the matter of whether Gizmodo, Hogan or both are guilty of violating trade secrets laws. The California Uniform Trade Secrets Act does not allow a journalistic exception to receiving property that contains proprietary trade secrets.

Gawker media, the parent company, was initially served a subpoena at the home of editor Jason Chen, but since then Chen and the company have voluntarily turned over all material relating to the acquisition of the iPhone. The company maintains it did nothing illegal, but its own attorney admits his client used "poor judgement."

Apple also has the option to file a civil lawsuit over the affair. The company will likely await the DA's decision on the criminal matter before considering further options. Apple has not commented publicly on the matter since April.

by MacNN Staff